Pages in topic:   [1 2] >
Negotiating confidentiality agreements
Thread poster: Nadezhda Kirichenko

Nadezhda Kirichenko  Identity Verified
Local time: 21:13
English to Russian
+ ...
Jan 27, 2011

THIS POSTING IS NOT INTENDED TO OFFER LEGAL ADVICE BUT FOR GENERAL INFORMATION PURPOSES ONLY

I meant to raise this issue a while ago and hope it is going to be useful for freelance translators.

I keep coming across a number of agencies insisting on translators signing confidentiality agreements which are increasingly cumbersome in nature. My attempts to negotiate some of them have not always been successful (in which case I usually prefer to walk away from the job as I feel that if the translator's needs and requests are not heard there might be potential issues). I feel that a lot of freelance translators simply sign the agencies' confidentiality agreements without trying to 'stand up for themselves'.

Indeed the bargaining power of an agency is much stronger than that of a freelancer based on the fact that it's the agency which ultimately provides the job and it is usually fairly easy for the agency to select a number of translators who would not bother studying the 'confidentiality issue' carefully let alone attempt to negotiate them.

I would like to emphasize that I am not voting against the confidentiality arrangements and in not way suggesting that the client's information may be disclosed to third parties. It goes without saying that a translator should keep the information submitted by the client as confidential. This is the basis of a client-translator relationship and part of professional ethos. Clearly, it's the client (agency) which is primarily interested in entering into confidentiality arrangements with translators given that it's the former which provides to the latter the information which may be market sensitive, etc. and it's only fair for a translator to provide their client the necessary level of assurance in this respect. But I would like to point out the major issues associated with entering into confidentiality agreements the terms of which are too onerous for a freelancer.

1. Indemnity

The primary issue for me has always been a case where the agreement contains an indemnity clause whereby the translator not only required to indemnify and hold the agency harmless (in the event of unauthorised disclosure of information that is defined as confidential in the agreement) but also cover ALL the agency's costs and expenses associated therewith. I don't have an issue with indemnity as such and I agree that it's fair to offer such comfort to the disclosing party. Although suggesting that ALL expenses and costs should be covered is simply unfair as it allows the agency to use the most expensive lawyers they can find, spend enormous amounts as travel expenses without capping them, etc.

Solution: a more acceptable approach would be stating that all REASONABLE costs and expenses would be covered. Hence, in the unlikely case of a legal dispute a judge would need to decide what would be the level of expenses that should be allowed and a concept of 'reasonableness' exists in the most jurisdictions. Also, it might be worth trying to put a top limit on the amount the translator can be liable for (taking into consideration the translator's income, terms of professional liability insurance, etc.)

2. Definition of Confidential Information

Very often the agreements state that ANY information received from the agency/client should be treated as confidential and there's a potential issue here as well. It is possible that part of the information submitted to the translator is already public / is in public domain which makes the requirement to keep such part of information confidential redundant. Also, it might be worth carving out the situation (which might be rare) where it is necessary for the translator to disclose the information by action of any court or regulatory authority or by a requirement of law (for the purposes of protecting the translator's rights for example).


3. Governing law and jurisdiction

Sadly, not much can be done to persuade the agency to change governing law / jurisdiction to that of the translator's location/territory but if the client's jurisdiction is in the country the legal system of which is either not well developed or completely unknown to the translator it's sometimes worth trying to suggest the governing law and forum (i.e. the court) in a "third" country such as England for example which is generally favoured by parties of international disputes. Another option would be choosing arbitration over litigation yet it is necessary to bear in mind arbitration may well be too expensive.

4. Duration of the confidentiality agreement

More often than not the duration of a confidentiality agreement would be unlimited. It has it's drawbacks as it would mean that if the translator keeps any files (i.e. if allowed to keep them by the terms of the agreements with the clients) he/she would need to ensure that such files are kept safe for eternity. Moreover, most of confidential information is time-sensitive so it is a perfectly fair argument for requesting to put a time limit for the confidentiality undertakings (say 5, 10 or 15 years depending on the case).

[Edited at 2011-01-27 12:54 GMT]

[Edited at 2011-01-27 14:16 GMT]

[Edited at 2011-01-28 11:37 GMT]


Direct link Reply with quote
 

Daniela Zambrini  Identity Verified
Italy
Local time: 22:13
Member (2005)
English to Italian
+ ...
great post! Jan 27, 2011

Thanks Nadezhda!


Direct link Reply with quote
 
The Misha
Local time: 16:13
Russian to English
+ ...
Confidentiality agreements are a non-issue Jan 27, 2011

for most of us in the predominant majority of all cases - and this is precisely the reason so many folks sign them without reading. An agreement is only as good as the options one may have for enforcing compliance - which in this case are close to none. Sue a translator on another continent for a confidentiality breach? Oh, please ... Even if they do, and win, there is still a long way from winning an award to collection. As an old, wise New York shyster once explained to me, you need at least two components for a successful lawsuit: recognizable damage and a deep pocket. Deep pockets we translators are not. Agencies know that, and for most of them confidentiality agreements are nothing but bidding requirements or an element of the bureaucratic "cover your butt" procedure - which partly explains why they may be so inflexible about changing anything in that menacing legalese. Who would want to risk their precious behinds? It's just easier to find a less picky provider.

That said, I do not - under any circumstances - advocate signing anything you are not happy with (did it once, didn't like the result). As the best among us never tire of saying, we are businesses, not employees. The days of the party line are long gone. We make our own rules and set our own terms. Yes, we also get to live with the consequences, but that's just a part of the game.

Relax, Nadezhda - and cheers from the other side of the pond.

MK

[Edited at 2011-01-27 13:15 GMT]


Direct link Reply with quote
 

Nadezhda Kirichenko  Identity Verified
Local time: 21:13
English to Russian
+ ...
TOPIC STARTER
to The Misha Jan 28, 2011

Such a simplistic approach is not too surprising as you think like the majority of business people would. Please bear in mind though that lawyers are paid for being extra cautious and often very conservative in order to minimise possible risks hence the thinking is along slightly different lines from yours. Although I praise your practicality, I'd suggest the following scenario:

An agency is sued by their client should something happen with the information 'the Big client' provided to the Agency (i.e. take important consultancy/audit reports, valuations etc. especially those relating public companies, their share listings, etc.) I would imagine the possibility of litigation/arbitration is not that remote if you think about it. How would agency try and minimise their risks costs? Go for the translator in question (if, God forbid, the latter has anything to do with it by being negligent or otherwise) and try and get at least something, and, trust me, their lawyers would try and evaluate whether it's worth suing a translator (checking the available options can be a fairly straightforward exercise simply on the basis of the information available about the potential defendant and the terms of contract b/w the parties) and in some circumstances it might well be the case.

Now take a look at the majority of the confidentiality agreements you've probably had to deal with. What does the section re. disputes/governing law/forum would tell you? You won't be surprised to see that in almost 100% cases the governing law will be that of the country where the agency (or its HQ) is registered and the forum is also one situated in the same territory. And they are hard or even impossible to negotiate. All you'd have to do is to follow the procedure and file a claim substantiated by evidence. And here you clearly underestimate the power of contract law and procedural rules in countries with developed legal systems. Putting legal costs and the times for litigation aside for a moment and assuming a decision is taken in favour of the agency you may find that some jurisdictions have reciprocal agreements on enforcement foreign court judgements. It simply means that a court judgement obtained in one such jurisdiction will be enforced by the local courts of the other jurisdiction where translator resides. It also means that in the majority of cases the translator's court will not be deciding the case on its merits, it will simply follow the rules applicable to enforcement of judgement made by a foreign court and they aren't that complicated.

re. financial status of a translator - we all know that a lot of translators are self-employed which in some jurisdictions means that they are liable with all their property, including personal assets and, you may well find, that not all translators have professional liability insurance. In such circumstances the risk that a translator can potentially be exposed to law suits is not that remote, especially (as mentioned before) the jurisdiction in question is a developed one and foreign judgments are not ignored by the local courts.

There's another point to be made. Whether or not a court case is imminent (which isn't often obvious for a potential defendant) any threatening letters/correspondence from your counter-party aren't not easy to deal with emotionally and are stressful. The initial tactics of a potential claimant would be to try and settle out-of-court which is not an easy thing to deal with either.

Is it all worth it? Isn't it easier to spend a couple of hours trying to negotiate an agreement which is not in your favour per se and try and make it a little bit more balanced and FAIR?

It may seem as irrelevant and minor issue but it will indeed serve as protection for your own 'precious behind' (as you nicely put it) in view of potential risks.


Direct link Reply with quote
 
dnitzpon
Germany
Local time: 22:13
Dutch to German
+ ...
Don't take it too easy Jan 29, 2011

Hi!

I can only agree with Nadezhda here. Confidentiality agreements may not be a big issue in practice (I've never met anyone who actually got sued, have any of you?), but nevertheless I don't like big swords hanging over my head (or my precious behind, for that matter (-: ).
I negotiated with an agency once who wanted me to sign a CA which stated that I was responsible for keeping my computers plus any channels of communication to the agency safe. However they would just send unencrypted emails and use regular FTP servers.
That's basically a carte blanche for them to sue me for everything, should something ever go wrong in their own business, and well, I'm not an insurance company and have no intend of becoming one, dammit.


Direct link Reply with quote
 

Kaiya J. Diannen  Identity Verified
Australia
Member (2008)
German to English
Another take on things Jan 30, 2011

I myself have rarely run into such complicated confidentiality agreements (or NDAs) as are being described here.

For me the more important (or at least more frequently important) issue is the agreements that (for example) agencies expect their linguists to sign in order to work with them at all.

These often include confidentiality clauses (which may be a whole 2 lines or may be just as complex as those discussed here), indemnity and venue/jurisdiction clauses, all sorts of (sometimes quite odd) provisions on procedures to be followed for how to work, how to save (or not save) files, how to build glossaries or TMs, how to proofread your own translations (and whether you can expect them to be proofread by someone else at all!), what kind of invoices will or will not be accepted and at what time of the month, non-compete clauses with a wide range of periods barring contact with clients (and just as wide a range of potential penalties), how many children you can expect to give up if the client complains and the agency gives them a discount, etc. etc. ...

I recently had a contract sent to me that was 11 pages! I wonder how many linguists simply went ahead and signed it, assuming that either a) everything in it is "probably just 'normal'", or b) if there really was a dispute, the distance between countries (indeed, around the globe) would protect them and their assets (which for all I know may be a very valid argument, thank goodness I've never had to test that theory out).

Personally, I believe both a) and b) to a large degree, but as dnitzpon stated, I really don't like to have anything hanging over my head (that I don't know about). I always make sure to read (and adjust and negotiate, as necessary) all of the contracts that I am expected to sign. Sometimes it's surprising to find out how reasonable some companies are after all, despite their sending a contract that was designed to put you in jail at the first sign of trouble.

IMHO, I think the OP's warning most definitely needs to be expanded to linguist service contracts in general - perhaps if the original subject just said "contracts/agreements" instead of "confidentiality agreements", more people would take heed of this important topic.


Direct link Reply with quote
 

Samuel Murray  Identity Verified
Netherlands
Local time: 22:13
Member (2006)
English to Afrikaans
+ ...
Comments Jan 30, 2011

Nadezhda Kirichenko wrote:
1. Indemnity
The primary issue for me has always been a case where the agreement contains an indemnity clause whereby the translator not only required to indemnify and hold the agency harmless (in the event of unauthorised disclosure of information that is defined as confidential in the agreement) but also cover ALL the agency's costs and expenses associated therewith.


I always delete an entire hold-harmless clause whenever I see it in an agreement with an agency. I would not even agree to pay *reasonable* costs and expenses. In my opinion, a hold-harmless clause is a vote of no confidence in one's own judicial system's ability to award appropriate costs.

2. Definition of Confidential Information
Also, it might be worth carving out the situation (which might be rare) where it is necessary for the translator to disclose the information by action of any court or regulatory authority or by a requirement of law (for the purposes of protecting the translator's rights for example).


I fool myself using the argument that no region allows citizens to remove themselves from that region's authority and voluntarily placing themselves under the juridiction of another region, so the laws of the residence of the translator will always supercede any agreement in an agency contract.


3. Governing law and jurisdiction
Sadly, not much can be done to persuade the agency to change governing law / jurisdiction to that of the translator's location/territory...


I'm not sure how this problem can be solved. I do realise that it can be a horrible pitfall if the region with jurisdiction has mechanisms in place that make it too easy for the agency to get a judgement against the translator.

I know too little about this, but one thing I do is to never limit the jurisdiction to a specific court or type of court, but rather to a region as a whole (although I realise that this may not necessarily change much). This is because of an open secret about similar clauses in my native country whereby the name of a lower court is inserted into the contract, permitting the one party to use the quick judgement mechanisms of the lower courts to obtain judgements for sums of money that would normally be awarded only in the higher courts.


Direct link Reply with quote
 
Theo Bernards  Identity Verified
France
Local time: 22:13
English to Dutch
+ ...
I don't think much of confidentiality agreements... Jan 30, 2011

I have my own Non-Disclosure Principle which I mention on my website. It is a rock solid guarantee that nobody but the paying agency (or any other paying client) will ever learn that I work for them: friends, family and business relationships know that I am a translator, that is all they need to know. My vision is simple: I am the one selling a service, the client has to agree to my terms & conditions (which I call "the small print" on my website, and to which I refer underneath every email I send in my email signature). If people comment I always refer to the supermarket: try imposing your terms and conditions there when you go shopping and see how far you'll get!

I also don't think much of so-called hold harmless clauses. I have come across clauses where at the sole discretion of the agency it could be decided that my translation would not be good enough and they reserved the right to re-outsource the assignment at my expense. Interesting earning model!

I have no problem with jurisdiction. Most western jurisdictions are pretty similar and I always err on the side of caution: if I don't like it, I don't sign it. I have a bigger problem with agencies that claim their fiscal authorities demand that if you work for an agency residing within their borders, you should disclose all kinds of information to the revenue authorities. Duh! I am a Dutchman living in France, so as far as I am concerned there are two fiscal regimes that can rightfully ask for my details: France and The Netherlands. I have come across US agencies demanding I fill out a tax form for the IRS, which I refuse outright. I have a intracommunautary VAT-number, although my statute in France exempts me from VAT. That is about all the information I provide. Given the fact that other agencies from the US don't ask me to fill out that form, I see no need to offer Uncle Sam my personal fiscal information.

I think it is time that certain agencies should back off a little. If they want such a big say in how their translators work, how they file their taxes, which tool they should use and how often they should open the way they operate to independent inspectors (yes, it happens!) they should offer employment with all the fringe and not so fringe benefits as pension, holiday pay and sick leave.

Mind you, I say certain agencies, because by and large most agencies I run into are very good and understand how freelance translators operate. It is the few peculiar ones that give the whole industry a bad name, not the countless good ones.


Direct link Reply with quote
 
FarkasAndras
Local time: 22:13
English to Hungarian
+ ...
Usually harmless Jan 30, 2011

The Misha wrote:

Confidentiality agreements are a non-issue for most of us in the predominant majority of all cases - and this is precisely the reason so many folks sign them without reading.


I agree. If you disagree, I invite you to post details of a case where a translator had trouble because of an NDA. I have never heard of such a case, which of course means nothing... but I do suspect that they are very very rare, and essentially only occur when a translator sells industrial secrets to the client's competitor. If you don't do anything crazy like that, you probably don't have anything to worry about.


Direct link Reply with quote
 
Laurent KRAULAND  Identity Verified
France
Local time: 22:13
French to German
+ ...
Professional liability insurance Jan 31, 2011

Another point of view should be considered. If you have a professional liability insurance, it is more than probable that you will not have the liberty of negotiating/signing such run-of-the-mill NDA's (especially the indemnity clauses) as the first person on your side to have a say when "problems" occur would be your insurance company.

Insurers generally refuse to be bound by clauses which are not in your PLI contract and/or to which they don't have agreed to in their conditions. And they have limitations as per the amounts they will pay per annum and per case. "Reasonable costs" may exceed this.

This is not legal advice either, but: consider your own long-term interests first and foremost.

And signing without reading is NOT an option: one may never have any kind of problems with that agency. Does this mean the agency makes one sign such agreements for the sake of formalism and that said agreements will not be enforced should difficulties arise? I don't think so.

(edited: addition of a paragraph)


[Edited at 2011-01-31 07:32 GMT]


Direct link Reply with quote
 

José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 18:13
English to Portuguese
+ ...
Bravo, Theo! Jan 31, 2011

Theo Bernards wrote:
I have my own Non-Disclosure Principle which I mention on my website. It is a rock solid guarantee that nobody but the paying agency (or any other paying client) will ever learn that I work for them: friends, family and business relationships know that I am a translator, that is all they need to know. My vision is simple: I am the one selling a service, the client has to agree to my terms & conditions (which I call "the small print" on my website, and to which I refer underneath every email I send in my email signature). If people comment I always refer to the supermarket: try imposing your terms and conditions there when you go shopping and see how far you'll get!


I did the same. I've published my own pledge of non-disclosure on my web site. Sometimes an agency with a rush job asks me to print, sign, and FedEx them their NDA. I refer them to my public pledge, and ask them if that's enough. Most of them so far have agreed that it is.

Sometimes the NDA works against the clients. Last year I translated and subtitled a video. The agency got it on a DVD, didn't 'waste time' making a backup, and sent it to the end-client. Sometime in all these months, the end-client - who also didn't bother to make backup copies, used mine in all their marketing presentations - lost the disk. Now both agency and the client are desperate to get a new copy. Thirty days after the project had been paid for, I completely deleted all traces of it here.

Theo Bernards wrote:
I think it is time that certain agencies should back off a little. If they want such a big say in how their translators work, how they file their taxes, which tool they should use and how often they should open the way they operate to independent inspectors (yes, it happens!) they should offer employment with all the fringe and not so fringe benefits as pension, holiday pay and sick leave.


My guess is that too many agencies hire outside lawyers to "write all the paperwork they might need in their relationship with vendors". These lawyers - upon noticing that translators get paid by the word - are struck by verborrhea, and decide to make a bundle. IMHO that's how most NDAs get written.

Once I got an NDA/Agreement by an end-client that, in spite of not being a translation agency, would require an enormous quantity of translation. It seemed to have been written by a highly skilled legal translator, instead of a lawyer. When they asked me if I had any objections to any clause, all I could tell them was that I wouldn't have written that agreement any better myself. Yet it gave both parties all the protection the situation required.

Previously, I had received a NDA from a translation agency wanting my sworn/certified translation services. They needed that signed and delivered to their offices before they could tell me the time of the day. I explained to them some 17 points where their clauses required/meant infringing the Brazilian law on certified translations. As the PM told me, these points were being analyzed by their legal department. Apparently they are still being analyzed... since November 2008!


Direct link Reply with quote
 

Daria Bontch-Osmolovskaia
Australia
Local time: 06:13
English
+ ...
great idea! Feb 1, 2011

Theo Bernards wrote:
I have my own Non-Disclosure Principle which I mention on my website. ...

I did the same. I've published my own pledge of non-disclosure on my web site. Sometimes an agency with a rush job asks me to print, sign, and FedEx them their NDA. I refer them to my public pledge, and ask them if that's enough. Most of them so far have agreed that it is.


Hi Theo,

that's an excellent idea, I love it! Would it be ok if I copied the text of your non-disclosure agreement, re-wrote it a bit and posted it on my own website, please?

Cheers,

Daria


Direct link Reply with quote
 

Samuel Murray  Identity Verified
Netherlands
Local time: 22:13
Member (2006)
English to Afrikaans
+ ...
@Theo Feb 1, 2011

Theo Bernards wrote:
My vision is simple: I am the one selling a service, the client has to agree to my terms & conditions (which I call "the small print" on my website, and to which I refer underneath every email I send in my email signature).


Yes, but when you receive a PO from the client, the PO often states that acceptance of the PO means acceptance of the client's terms and conditions, which may overrule yours. If you want to enforce your terms and conditions, you'd have to ensure that every time a client sends you a PO with such a wording, you send a message back asking the PM each time, to confirm that you are not required to submit to the client's terms and conditions and that the client submits to yours.

Your terms and conditions may say "this supersedes everything else", but generally the agreement accepted most recently is the agreement that sticks, and if you accept a job from the client with the client's terms and conditions, then your terms and conditions has just been superseded.


Direct link Reply with quote
 
Laurent KRAULAND  Identity Verified
France
Local time: 22:13
French to German
+ ...
Exactly! Feb 1, 2011

Samuel Murray wrote:

Theo Bernards wrote:
My vision is simple: I am the one selling a service, the client has to agree to my terms & conditions (which I call "the small print" on my website, and to which I refer underneath every email I send in my email signature).


Yes, but when you receive a PO from the client, the PO often states that acceptance of the PO means acceptance of the client's terms and conditions, which may overrule yours. If you want to enforce your terms and conditions, you'd have to ensure that every time a client sends you a PO with such a wording, you send a message back asking the PM each time, to confirm that you are not required to submit to the client's terms and conditions and that the client submits to yours.

Exactly! The most recent document exchanged between the parties is most of the time considered as being the binding one.

This is why mutually negotiated contracts, being enforceable for let's say 12 months, would be close to ideal. But this is a dream: most PM's have close to no decision authority.


Direct link Reply with quote
 

Samuel Murray  Identity Verified
Netherlands
Local time: 22:13
Member (2006)
English to Afrikaans
+ ...
Theo's NDA Feb 2, 2011

Theo Bernards wrote:
I have my own Non-Disclosure Principle which I mention on my website. It is a rock solid guarantee that nobody but the paying agency (or any other paying client) will ever learn that I work for them.


I can't find your non-disclosure agreement/statement/pledge/principle on your web site. You refer to it but don't actually provide it. Or am I missing something?


Direct link Reply with quote
 
Pages in topic:   [1 2] >


To report site rules violations or get help, contact a site moderator:


You can also contact site staff by submitting a support request »

Negotiating confidentiality agreements

Advanced search







PDF Translation - the Easy Way
TransPDF converts your PDFs to XLIFF ready for professional translation.

TransPDF converts your PDFs to XLIFF ready for professional translation. It also puts your translations back into the PDF to make new PDFs. Quicker and more accurate than hand-editing PDF. Includes free use of Infix PDF Editor with your translated PDFs.

More info »
memoQ translator pro
Kilgray's memoQ is the world's fastest developing integrated localization & translation environment rendering you more productive and efficient.

With our advanced file filters, unlimited language and advanced file support, memoQ translator pro has been designed for translators and reviewers who work on their own, with other translators or in team-based translation projects.

More info »



Forums
  • All of ProZ.com
  • Term search
  • Jobs
  • Forums
  • Multiple search